Estee Lauder is making a big play for the millennial market by acquiring Too Faced, the maker of quirky cosmetics such as Better than Sex mascara and Melted Matte lipstick, for about $1.45 billion.
Too Faced has grown fast since former Estee Lauder employees Jerrod Blandino and Jeremy Johnson founded the brand in 1998, with net sales expected to reach more than $270 million this year. Last year, they sold a majority stake to private equity firm General Atlantic in a deal that reportedly valued the company at $500 million.
Estee Lauder is paying almost triple that amount in the largest-ever acquisition in the firm’s 70-year history.
“Too Faced creates an emotional, authentic connection with consumers and has developed a strong following and built a vibrant community among millennials who are passionate about social media, fashion and pop culture,” Estee Lauder said in a news release.
According to The Wall Street Journal, Too Faced has taken an unconventional marketing approach, selling its products primarily at cosmetics retailers, such as Sephora and Ulta Beauty, which allow shoppers to serve themselves, rather than at department store makeup counters.
The combination of the Too Faced deal with Estee Lauder’s earlier acquisition of Becca Cosmetics for more than $230 million “should elevate Lauder’s profile in the millennial rich multi-unit specialty store and key digital channels,” Women’s Wear Daily said.
As Reuters reports, older cosmetics companies have struggled to “capture the interest of millennial shoppers.” Estee Lauder, the maker of Clinique skin care and Smashbox makeup products, recently reported quarterly sales that missed estimates as fewer shoppers visited department stores in the United States.
“The acquisition of Too Faced is complementary to our portfolio of brands because it has a unique feminine and millennial communication focus, which is really complementary with very little cannibalization with the rest of our makeup portfolio,” Estee Lauder CEO Fabrizio Freda told WWD.
Fashionista noted that Too Faced “has become a favorite amongst many beauty bloggers and influencers.” The company has more than 7.3 million Instagram followers.